For 50 years AÏDA has been at the forefront of Real Estate services in South Africa. Named after its founder Aïda Geffen, AÏDA has been delivering quality products and services to members and consumers alike since 1958. When home buyers and sellers think real estate, they think of the AÏDA brand, a Real Estate Group most likely to service their home ownership needs.

Thursday, 10 January 2013

West Coast homes and plots offer great value for home-hunters and investors

Article rank15 Dec 2012Weekend Argus (Saturday Edition)

PROPERTY prices in scenic towns along the West Coast have risen in the past year and the region is again attracting property investors. Johan Truter, of the Aida West Coast franchise, says the dramatic drop in buyer interest and prices that occurred at the start of the recession in 2008/09 has been reversed and the market has stabilised.

“Distressed proper t i e s flooded the market at the start of the recession because many were second properties that owners could no longer afford, and properties on auction realising only 25 percent of their market value were not uncommon,” he says.

“However, bank- assisted sales have helped to stabilise t he market and have made wider access to the market possible for buyers of first homes.” Prices started climbing again about a year ago but about 80 percent of homes on the market are priced at about 80 percent of re placement value, making them excellent investments at the moment.

“Low interest rates have also sparked renewed activity among buy-to-let investors, as they realise that if they buy now while prices are low they can look forward to increasing value as well as rental income, which represents a yield about 30 percent higher than any other asset class.

“For instance, cash buyers who would earn about R24 000 a year on a deposit of R500 000 stand to earn about R3 300 a month on a rental unit of R500 000, and that’s besides the capital growth. Investors who make use of bank finance can cover about 60 percent of bond repayments from rentals and enjoy the benefits of capital growth.”

Truter says undeveloped stands offer particularly good value now compared with prices during the buying frenzy at the height of the boom. Prices of 600m² stands with sea views now start at around R160 000, as opposed to starting prices of about R400 000 in 2007, and new development is slowly gaining traction. Two- or three- bedroomed townhouses on 300m ² stands are selling for between R500 000 and R600 000 and achieving monthly rentals of between R3 000 and R4 000. Three-bedroomed family homes are selling at between R700 000 and R900 000 and achieving rentals of R4 500 to R5 500 a month.

Buyers include retired people who choose small units or stands on which they develop two units, one for their own use and the other to rent out to help service their bonds. Truter says that apart from the scenic sur roundings of t he area, excellent medical facilities and services are a big attraction for retired people.

First-time buyers employed by Telkom, Transnet and at the naval academy are also active in the market, thanks to affordable bonds at current low interest rates.